Friday, July 7, 2017

Should I Delay on Buying As House Prices Are Dropping?

This article says it all. I was asked if it is okay to hold off on buying as prices are coming down. It is noteworthy that prices are still rising in the traditional 'year over year' way. What has come down are the number of transactions and the month to month prices. June average prices was lower by 8% than May's but was still higher by 6.3% than a year ago. So analyze your needs.

Read about it here:
A Toronto Star article

June 2017 TREB Chart Showing Average Resale Home Prices

The above bar chart shows the average home resale prices up to last month June for 2017 as well as for the full year for 3 years to 2014.
I dashed a red line at the top of each bar for 2017 and a blue line for 2016 so that a seasonal trend can be readily seen. Now note this:

Red line- the sharp rise from January to past May is indicative of the unusual buying frenzy we just experienced where prices rose as high as 20% monthly where bidding was the norm frustrating a lot of buyers. Then the curve turns downward indicating a drop in prices.
Blue line- follows the seasonal price trend for 2016. Note that the curve closely matches those of the previous years.

The downward red curve past May to date is more likely a market correction of the sharp rise starting from the beginning of the year to mid-May when government imposed more stringent regulations on buying and the realization by buyers that such a sharp rise is not really sustainable . The red dotted line is a more likely prediction of what the future months will be like price wise as borne by top of each bar in previous years but higher.

Should you delay buying as prices are going down? I won't count on it is my guess. Even with the recent monthly drop in prices, the dollar values of homes are still higher than last years.

Tuesday, July 4, 2017

Is There An Impending Interest Rate Increase?

There has been two articles posted in The Toronto Star recently about the Bank of Canada governor making statements that seemed to imply that rates will be going up. While we won't know until July 12 as to what he will actually do every homeowner or prospective home buyers should keep track of rates.
Here are the links to those articles-

https://www.thestar.com/business/economy/2017/07/04/bank-of-canada-governors-comments-fuel-talk-of-interest-rate-hike.html

https://www.thestar.com/business/2017/06/28/low-interest-rates-have-done-their-job-bank-of-canada-governor-says.html

Interest affects everyone with a mortgage as a homeowner or a prospective homeowner or whether one is selling and buying as an upgrade of their present abode. It will also affect a mortgagor if your mortgage term is about due depending on the new rate- in which case it may be best to speak with your realtor or mortgage broker about early renewal.

Do a copy and paste to the above links if necessary.

Tuesday, June 13, 2017

Sales down, Prices Still Up

Toronto home sales decline continues into June

The number of house sales is still dropping as new listings hit the market.

Last week was the eighth consecutive week that real estate sales declined in the GTA, according to Realosophy.

By Tess KalinowskiReal Estate Reporter

Mon., June 12, 2017

Toronto-area lawns are still sprouting “For Sale” signs even as the number of home purchases continued to decline into June, says online brokerage Realosophy.

It found that sales of houses (detached, semi-detached and towns) across the region were down 44 per cent last week compared to the previous week.

York Region is still showing some of the largest declines of about 60 per cent in some areas, said company president John Pasalis.

"The sales numbers keep getting worse,” he said. “It's like they've fallen off a cliff. It's this downward momentum week after week."

Although the Toronto Real Estate Board (TREB) issues monthly statistics, Pasalis said he started tracking weekly sales because the market is so volatile, although he acknowledged that it represents a small sample.

Article Continued Below

His numbers show that June, so far, is continuing some of the downward trends TREB identified in May. It reported that prices had slipped about 7 per cent from April, although homes still cost about 15 per cent more than they did in May 2016.

In fact, last week was the eighth consecutive week that sales declined, according to Realosophy.

Meanwhile, the number of re-sale homes on the market rose 43 per cent last month compared with May 2016.

Thursday, June 8, 2017

Has The House Buying Frenzy in Toronto Normalized?

Cooling Toronto housing market a return to normal, say realtors

Buyers now have more choice, more time and even a little more negotiating power.

The boost in supply of re-sale homes in May is down to strong prices in the first quarter and the provincial housing policy announced in April that have prompted some owners to cash out their equity, according to TREB. (Bernard Weil / Toronto Star File Photo)

Excerpted from The Toronto Star

By Tess KalinowskiReal Estate Reporter

Mon., June 5, 2017

That faint hissing sound — music to the ears of Toronto home buyers — could be the air escaping the region’s housing market.

It could also be the barely concealed frustration of sellers, who listed their homes this spring expecting to attract cut-throat bids from desperate, over-extended buyers. Instead they are seeing fewer showings and fewer offers.

Toronto area home prices dipped about 7 per cent in May compared to April but remained about 15 per cent higher year over year averaging $863,910.

Even as the market has soared, there were some month-to-month price declines, said Jason Mercer, director of market analysis for the Toronto Real Estate Board (TREB), which released its month-end May statistics on Monday.

December’s average home price was $46,212 lower than November’s $776,684 but it is “somewhat unusual” in the peak spring season, he said.

Article Continued Below

The last year-over-year price decline was 2012, said Mercer.

May’s cool down came with a 43 per cent increase in active listings.

But there’s no indication that a bubble has burst, he said. That would require some dramatic change in the economic environment — a real rise in lending rates or a shift in regional employment.

Friday, May 12, 2017

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